US IRS tax reporting for cryptocurrencies


#202

Crystal clear. Thanks everyone!


#203

Hi Peter,

      Being a CPA you seem to be knowledgeable on this topic. I'm about to get into mining with a buddy of mine. What do you recommend would be the best way to pay taxes as we'll both be splitting any profit gains. 

Thanks in advance,

Alain


#204

I think this is all going to depend on how you form the business and do payouts. Not a CPA here but I think forming an LLC or something might be necessary and then the company pays each of you a salary.

Also what are you doing to create the single line that you have to scroll through to see the post? It is a bit awkward.


#205

Alain,

That’s a pretty interesting request. PM me with your answers Do not post your replies out in the open.

I’d have to get some more information from you before I could even start to answer it. Such as:

  • Are you currently employed by someone other than your mining operation and are income taxes withheld from your paycheck;
  • If you are married, is your spouse also employed and having income taxes withheld from their earnings?
  • Do you have other business income where you have already set up estimated tax payments?
  • Do you have other investments from which taxes are being withheld?

Tell me about your income flows in general - from where in general? are they pretty stable?

I can only do this on the presumption that you are splitting the fiat that rolls out of the operations. It would be up to you to schedule your fiat cash flows so you can pay taxes and live a normal life.


#206

Hey LDBronx thanks. It seems it’s better to focus on the daily pricing instead of real time pricing. I also understand the loss concept. Well, time to get these taxes out the way this weekend.


#207

Hey guys

What happens if you cash out in another country like Korea? Is that considered taxable? I don’t think there is a tax on crypto yet but I believe they will be. I currently file under the bona fide residence/ physical presence test which defers my federal income taxes. I’m wondering how this would apply to me. If someone could please give me some advice I would really appreciate it, thanks!


#208

Marshall, I’m not in any respect an expert in Expat taxes. I did briefly look at some internet tax channels and see that there are maximum income exclusion amounts that may apply to you. Since I don’t know the particulars of your income I can only suggest that you start your own research on the subject. Start it by looking at “IRS Publication 54” then doing a Google search for “bona fide residence/ physical presence test”.

Do you have any personal contacts over there who can point you to a good starting point?

Let me know if I can be of any other assistance.


#209

Hello peter_rehm, I got a question for you, now that we had this closing problem with bitconnect selling unregistered securities, and it’s consider by everyone it’s a Ponzi scheme…

Do I still have to pay taxes on the bitcoin that I invested into bitconnect?


#210

Jesus,

There are actually a couple of questions here:

Do I still have to pay taxes on the bitcoin that I invested into bitconnect?

Your initial transfer of BTC from you to Bitconnect is most probably not taxable. I say “probably” because I don’t know the exact circumstances under which you bought in. Presuming though that you had no prior contact with them your “buy in” is non-taxable.

The investment that is taxable is the earnings you had each month that were required to be rolled back over into lending program. You must take that as ordinary income.

… problem with bitconnect selling unregistered securities …

I have heard this assertion that they were selling unregistered securities. If it is true you will be able to take your loss on Schedule D of your income tax return. If, though, the loss is classified the same way as the Madoff Ponzi scheme, you’ll only be able to take a very small $100 loss on your 2018 return as the lending platform ceased operations in that year.

Are you using a CPA or a Lawyer to prepare your income tax return for 2017??


#211

I have a really great resource! The folks over at CryptoTaxPrep.com are experts at crypto taxes.

The have a facebook group where they answer questions.
https://www.facebook.com/groups/cryptotaxsupport/


#212

Just an tax account… all the profits I haved received I reinvested back in it right away…

  1. It’s not taxable, right?
  2. So you are saying all the bitcoin I invested in it it’s not taxable?

I invested $13,120 and now I have about 47bitconnect tokens that are valued right now at $376.00 so I’ve haved lost a bulk full of money at this point… it’s a shame… I haven’t withdraw any amount ever since my first initial Investment


#213
  1. The initial investment is “quite probably” not taxable. I have nothing to go by to confirm it’s not (eg It could be if you are getting something of value other than the Bitconnect investment). If it's just the initial investment then it's not taxable.

  2. The reinvested earnings/ profits ARE TAXABLE.

  3. I believe that the loss occurred in 2018 when they shut down the lending platform. You may have different tax laws to apply the loss to at that time.


#214

Like-kind exchange does not apply to cryto.

Check out this handy tax guide for more info.

https://goo.gl/4E98HJ


#215

Are you just shilling or are you a contributor to the group??


#217

Removed duplicate links and post.


#218

Hi Peter! I am contributing. I corrected the response about crypto-to-crypto taxes. There’s a lot of incorrect info going around.


#219

You seem to be shilling to me. You just directed a guy back to a Happy Tax site.

I’m a CPA who would be aghast if I ever gave anyone “incorrect info”.


#220

I don’t understand. I didn’t give someone incorrect info – and I didn’t say you did either. Someone posted about like-kind exchange and I corrected them. Sorry if I am offending you.


#221

Laura 415: No shilling allowed here


#222

Peter I’m sorry to ask to many questions, but I want to make sure I’m good with IRS, on the IRS.gov it says if I’m not mistaken that everyone it Has to pay taxes when the sell to buy another crypto currencies;

  1. So your saying I don’t have to pay taxes on my bitcoins I use to buy bitconnect coins in order to lend it?

  2. are you sure I have to pay income taxes on my reinvestment?
    It’s because I believe in stocks As long as you reinvest your profits it’s not taxable, it’s only when you withdraw your profits, right?
    I believe it’s called unrealized gains…